Risk identification and assessment involves organizing all potential risks into a matrix that considers their frequency, severity, and current insurance coverage. This method allows for a comprehensive evaluation of the various risks that a company may face, enabling it to make informed decisions about mitigating these risks. By understanding the likelihood and impact of each risk, businesses can effectively prioritize and address them, ultimately protecting their financial stability. This approach is a crucial aspect of financial management, ensuring the long-term success of a company.
